Berkshire Hathaway makes Howard Buffett chairman as his father steps back
Warren Buffett, 96, becomes chairman emeritus with immediate effect and stays on the board. His eldest son, a director since 1993, takes the chair, while Greg Abel continues to run the company.
Warren Buffett stepped down on Friday as chairman of Berkshire Hathaway, the failing textile mill he bought in 1965 and turned into a trillion-dollar conglomerate. He is 96. The change took effect immediately.
The board elected his eldest son, Howard G. Buffett, a director since 1993, as chairman, and named the father chairman emeritus. Warren Buffett remains a member of the board. In a letter to shareholders he wrote that Father Time always wins.
Three chairs where one man sat
The arrangement is the part worth reading. For decades one person was chairman, chief executive and public face of Berkshire at once. That is now three jobs held by three people. Greg Abel, who took over as chief executive at the turn of the year, runs the business. Howard Buffett has the chair. His father keeps the voice without the title.
The split was deliberate, and Buffett explained it in a single line: Greg runs the company, Howard guards its culture and values. It is the shape a business adopts when it fears drift more than it fears mismanagement, and it leaves the family as custodian rather than operator.
Howard Buffett did not come up through markets. He has chaired his own foundation since 1999, working on global food security and conflict mitigation, and spent nearly a decade as a United Nations goodwill ambassador against hunger for the World Food Programme. The choice says plenty about what Berkshire wants from that seat.
Eight months between the two exits
The timeline is unusually tidy for a succession. Buffett flagged the chief-executive handover far in advance and completed it with Abel at the start of the year. The chairmanship held on for another eight months, long enough for investors to watch the new boss work before losing the name that guaranteed continuity. By Buffett’s own account, it was Abel exceeding his expectations that made this step easier to take.
For ordinary shareholders it is a reminder that the governance of a listed company changes because a board decides it, and that the people holding the shares are rarely asked. Portugal produced a far blunter version of the same lesson this week, with Vista Alegre leaving the Lisbon exchange and giving remaining holders three months to sell.
Berkshire is still the same collection of insurers, railways, energy assets and stakes in listed giants. It is simply the first time in sixty years that none of the jobs running it has Warren at the front of the name.
By Beatriz Mota
Image: USA International Trade Administration (public domain)
